The European Central Bank (ECB) has reduced interest rates for the eighth time, bringing the deposit rate down to 2%. This decision comes amid uncertainty surrounding inflation and economic growth in the Eurozone, influenced by global trade disruptions due to tariffs imposed by former U.S. President Donald Trump. According to a Bloomberg survey, analysts predict another rate cut in September as negotiations with the U.S. conclude. The ECB forecasts inflation to drop to 1.6% in 2026, below the previous estimate of 1.9%, while stabilizing near the 2% target. Despite potential short-term declines in growth and inflation, substantial European spending on defense and infrastructure could drive long-term increases, complicating monetary policy adjustments, according to Jari Stehn, chief European economist at Goldman Sachs. This situation may prevent ECB President Christine Lagarde from providing clear guidance on future rate moves beyond June. She is scheduled to hold a press conference in Frankfurt shortly after the ECB’s decision announcement.
— new from (الاقتصادية)
